ACCT 434 Midtrm Exam 1

ACCT
434 Midtrm Exam

Page:
One
1. (TCO1) ABC systems create

2. (TCO 1) Merriamn Company provides
the following ABC costing information. How much of the account billing cost
will be assigned to Department B?

3. (TCO 2) A master budget

4. (TCO 2) Dalyrymple Company produces a special spray nozzle.
The budgeted indirect total cost of inserting the spray nozzle is $80,000. The
budgeted number of nozzles to be inserted is 40,000. What is the budgeted
indirect cost allocation rate for this activity?

5. (TCO 3) Which cost estimation method analyzes accounts in
the subsidiary ledger as variable, fixed, or mixed using qualitative methods?

6. (TCO 4) In evaluating different alternatives, it is useful
to concentrate on

7. (TCO 5) The theory of constraints is used for cost analysis
when

8. (TCO 5) Schmidt Corporation produces a part that is used in
the manufacture of one of its products. The costs associated with the
production of 10,000 units of this part are as follows. Phil Company has
offered to sell 10,000 units of the same part to Schmidt Corporation for $18
per unit. Assuming there is no other use for the facilities, Schmidt should

9. (TCO 3) The cost function y = 100 + 10X

10. (TCO 4) Sunk costs

Page: Two
1. (TCO 1) For each of the following drivers
identify an appropriate activity.

2. (TCO 2) Favata Company has the following
information:……………In addition, the cost of goods sold rate is 70% and the
desired inventory level is 30% of next month’s cost of sales. Prepare a
purchases budget for July through September.

3. (TCO 3) Patrick Ross, the president of Ross’s Wild Game
Company, has asked for information about the cost behavior of manufacturing
overhead costs. Specifically, he wants to know how much overhead cost is fixed
and how much is variable…………….Using the high-low method, determine
the overhead cost equation. Use machine-hours as your cost driver.

4. (TCO 5) Kirkland Company manufactures a part for use in its
production of hats. ………….Mike Company has offered to sell to Kirkland Company
10,000 units of the part for $6.00 per unit. The plant facilities could be used
to manufacture another item at a savings of $9,000 if Kirkland accepts the
offer. In addition, $1.00 per unit of fixed manufacturing overhead on the
original item would be eliminated. a. What is the relevant per unit cost for
the original part? b. Which alternative is best for Kirkland Company? By how
much?